BS-VI FUEL TO COST MORE THAN LOWER GRADE PETROL, DIESEL

With the Union government set to introduce BS-VI grade automobile fuel in Delhi from April 2018 and across the country from April 2020, oil industry officials said the clean fuel could cost at least 25-30 paise a litre more than the BS-IV grade.

Once the fuel is introduced in Delhi, there is likely to be different pricing for BS-VI and BS-IV grades. The launch of BS-VI fuel was advanced last week in order to tackle air pollution in Delhi. The higher price of BS-VI fuel will be on account of the ~30,000-crore investment the three oil marketing companies, Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL), will make to upgrade their refineries.

BS-VI diesel and petrol will have five times lower sulphur content than BS-IV levels — an 80 per cent reduction. “A hike of 25-30 paise is expected if diesel and petrol consumption touches around 109 million tonnes from the current 100 million tonnes, taking into account the expected investment,” said a Mumbaibased analyst.

The oil marketing companies have been asked to look at the possibility of providing BS-VI fuel in the national capital region from April 2019.

BS-VI emission norms will apply to vehicles from April 2020, which means the higher grade fuel in Delhi will be used in BS-IV vehicles. This will generate limited gains in emission control.

“There will be dual pricing. BS-VI fuel will cost a bit more than BS-IV. BSVI fuel will be supplied in a small quantity only to Delhi from the Meerut and Panipat refineries,” said an executive with a state-run oil marketing company.

When asked about the possible difference in pricing, Petroleum Minister Dharmendra Pradhan said, “This is a commercial decision. We will not be able to comment in advance.”

The government had earlier decided to skip BS V and leapfrog to BS-VI. “There was dual pricing when BS III and BS-IV fuel was being sold simultaneously. However, there are no plans for phasing out BS-IV. It will be out of the market only in 2020,” the official said.

Delhi consumed 906,000 tonnes of petrol and 1.26 million tonnes of diesel in 2016-17. The city has around 2,600 fuel retail outlets selling 200,000 litres of petrol and diesel a day.

Pradhan said at an event on Wednesday that efforts were being made to reduce the country’s import of crude oil by 10 per cent by 2020 and the focus was on increasing the production of biofuel. “As part of the national policy on biofuel, oil marketing companies will offer 100 per cent offtake guarantee to biofuel manufacturers and we expect the industry to reach ~100,000 crore turnover by 2030,” Pradhan said.

He added that India had developed indigenous technology to create bio-CNG from urban waste, which has the potential to supply 60 million tonnes of CNG.